Shares in Telefonica Brasil, the country's largest wireless carrier, have risen around 4 percent this year while TIM, which this week missed earnings expectations on slow revenue growth in an increasingly competitive telecoms market, has seen the value of its stock fall almost 6 percent.

The Brazilian subsidiary of Spain's Telefonica reported a quarterly operational net revenue of 10.975 billion reais, up 1.7 percent from a year ago, as operational costs fell by 5.4 percent to 6.614 billion reais.

Telefonica Brasil said in a securities filing that its net profit hit 1.342 billion reais ($341.71 million) in the first quarter compared to 1.098 billion reais a year ago.

Excluding effects from a shift in international accounting standards, net income was 1.387 billion reais, also above a consensus estimate of 1.282 billion reais compiled by Refinitiv.

Financial expenses fell 48.1 percent to 90 million reais, as the telecoms group cut its net debt by almost 60 percent year-on-year amid lower interest rates.

Investments rose 9.6 percent in the first quarter, hitting 1.696 billion reais, with resources mostly allocated to the FTTH (fibre to the home) network, as well as to 4G and 4.5G technologies.

Earnings before interest, tax, depreciation and amortization (EBITDA) grew by 14.9 percent to 4.36 billion reais, due to expansion in mobile and broadband revenues, as well as cost controls. Analysts on average had expected EBITDA of 3.9 billion reais, according to Refinitiv data. ($1 = 3.9273 reais) (Reporting by Gabriela Mello; Editing by Kirsten Donovan and Alexander Smith)